Have you heard about the small business HRA Employee Notice deadline that is quickly approaching on February 19, 2018? The deadline pertains to small business HRAs that started between Jan 1, 2017 and Jan 1, 2018.
Employers with QSEHRA plans under this date range must provide their employees the initial Employee Notice of the QSEHRA benefit by February 19, 2018. Employers who fail to provide Employee Notices to employees will be penalized $50 per employee (up to the maximum $2,500 per calendar year per eligible employee. Plans starting after Jan 1, 2018 must provide the QSEHRA Employee Notice on or before the HRA start date.
Here's what to know.
What’s in the Employee Notice?
IRS Notice 2017-67 contains guidelines on the small business HRA initial written notice contents and provides an example of written notice.
The Employee Notice must contain the following information:
- A statement of the permitted benefit amount for which the employee might be eligible and the date the small business HRA is first provided to eligible employee.
- A statement that the eligible employee must inform any Marketplace to which the employee applies for advance payment of the premium tax credit (APTC) of the amount of the provided benefit.
- A statement that the amount of the provided benefit may affect the eligibility for and the amount of the premium tax credit and that the employee should retain the written notice because it may be necessary to calculate the premium tax credit on the employee’s individual income tax return.
- A statement that if the eligible employee does not have minimum essential coverage for any month, then the employee may be liable for an individual shared responsibility payment under Section 5000A of the Affordable Care Act for that month and that reimbursements under the small business HRA for expenses incurred in that month will be included in the employee’s gross income.
The Employee Notice can be delivered electronically according to the guidelines the IRS has set forth.
How the guidelines affect our clients
Take Command Health clients can be rest assured that their Employee Notice’s have been delivered to Employee’s during enrollment. The employee notices were prepared based upon a reasonable, good faith interpretation of the 21st Century Cures Act as permitted under IRS Notice 2017-20.
Take Command Health is reviewing the notice requirements and will update the notices before the February 19 deadline if deemed necessary. The updated notices will be available through the employee portal and employers will be notified of the updates.
I wrote this blog because I love helping people decode confusing insurance jargon and understand the fine print. I'm a licensed health insurance professional and specialize in simplifying health insurance for individuals and small businesses. My QSEHRA articles have been featured regularly on Accounting Today, Accounting Web, HRWeb, and other industry publications. I'm also a member of Take Command Health's client success team and a full-time mom. Learn more about me and connect with me on our about us page. Thanks!